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Jet Airways Lenders Not Considering New Revival Proposals, Say Sources

The group of professionals, representing the minority shareholders of the cash-starved carrier, have been frequent flyers of Jet Airways in the past.

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Jet Airways news: According to the proposed plan, the employees will first take control of the carrier


Highlights

  1. Group of professionals represents minority shareholders of Jet Airways
  2. Some of its members have been frequent flyers of Jet Airways in past
  3. Cash-starved Jet Airways suspended all its flight operations last month

Jet Airways lenders have not considered any new proposals made by people on the revival of the grounded carrier. Officials from the lenders told NDTV that four expressions of interest (EoI) had been sent to the consortium, and final bids were expected by the evening of May 10. Struggling with a debt of more than $1.2 billion, the airline - which suspended all its flight operations last month - owes money to lessors, suppliers, pilots and oil companies. Jet Airways' group of lenders have taken a controlling stake in the airline, and are currently in the process of selling a stake to recover their dues.

Here are 10 things to know about the Jet Airways crisis:

1. The expressions of interest were from Etihad Airways, TPG Capital, Indigo Partners and National Investment and Infrastructure Fund (NIIF), the lenders told NDTV.

2. The comments from the airline's lenders came after a group of nine professionals had proposed to make the now-grounded Jet Airways an employee- and passenger-owned airline, sources told NDTV.

3. The group of professionals represents the minority shareholders of the cash-starved carrier, and some of its members have been frequent flyers of Jet Airways in the past. Some of the individuals are also minority shareholders of Jet Airways lenders, according to the sources. "The professionals have proposed a three-step leveraged buyout plan," they added.

4. The group of frequent flyers of the now-grounded carrier has approached key lenders including State Bank of India (SBI), ICICI Bank and Punjab National Bank.

5. Claiming to be reputed professionals and minority shareholders in Jet Airways as well as nine banks that have lent money to Jet, the group has proposed a leveraged buy-out plan (LBO) to revive the grounded airline.

6. According to the proposed revival plan, Jet Airways employees will first take control of the airline and take loan from existing lenders and invest in the company, eventually becoming part-owners. In the next step, the plan is to raise money involving the frequent flyers.

7. The airline remains grounded and its revival depends upon fresh fund infusion by the investors. Rival airlines have also been scooping up aircraft that were formerly operated by Jet from its lessors, and poaching hundreds of its pilots, cabin crew and other staffers. (Also read: Air India Won't Take Boeing 777 Aircraft From Jet Airways)

8. The government sees little hope of a bidder emerging for the debt-laden Jet Airways, news agency Reuters reported earlier this week citing two senior finance ministry officials, even as thousands of employees plead with the government for a rescue.

9. Jet had a fleet of more than 120 aircraft but more than half have been deregistered and repossessed by lessors. The aviation authorities have also been temporarily farming out Jet's slots to rival carriers as airfares have soared in the wake of Jet's shutdown.

10. State Bank of India (SBI) said last month that it expected bidders to submit binding bids by April 30, and to complete the sale process this month. However, bankers involved in the process told Reuters last week that no binding bids had emerged.

(With agency inputs)



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